cargotec q3 2019 interim report presentation · cargotec’s january-september 2019 interim report...

Profitability improved

22 October 2019

22/10/2019Cargotec’s January-September 2019 interim report 1

Cargotec’s interim report January–September 2019Mika Vehviläinen, CEO • Mikko Puolakka, CFO

Contents1. Group level development2. Business areas3. Financials and outlook


Highlights of Q3 2019 – strong improvement in operating profit

Cargotec’s January–September 2019 interim reportMika Vehviläinen, CEO • Mikko Puolakka, CFO

58

70

5764

68

7.2%7.7%

6.7%7.1%

7.6%

Q3/18 Q4/18 Q1/19 Q2/19 Q3/19

Comparable operating profit EUR millionComparable operating profit margin

Comparable operating profit up by 18% compared to Q3/18 Kalmar’s comparable operating profit

increased by 24% compared to Q3/18 Hiab’s comparable operating profit up by 41% MacGregor’s comparable operating profit

was MEUR -5.8 millionTTS result has been consolidated into MacGregor's financial figures as of 1 August 2019


TTS acquisition completedOverview of the acquired business

AcquisitionStrategic rationale

Service growth potential

Strengthening MacGregor’s position also in China

Based on revised estimates, potential cost synergies are estimated to be aroundEUR 25-30 million on annual level

Employs ca. 600 people

Services 26% of revenues

Estimated 2019 sales EUR 50 million, comparable operating profit at break-even

Closing balance sheet expected to be completed during Q4

Restructuring costs ca. EUR 40 millionin 2019

Acquired businesses represent around 90% of total sales of the TTS Group

Announced enterprise value EUR 87 million

Acquisition was completed on 31 July 2019

TTS results have been consolidated into MacGregor's financial figures as of 1 August 2019


Growth in number of containers handled at ports continued Customers are starting automation

projects mainly with phased investments

Construction activity increased in Europe and grew slightly in the US

In the merchant sector, the orders received remained at a low level In offshore, activity remained on a

low level. Sales declined slightly

Market environment1-9/2019

Source: Clarkson Research (number of ships and offshore units)

Indicative historical average

683 5540

500

1,000

1,500

2,000

1-9/18 1-9/19

56 320

100200300400500

1-9/18 1-9/19

1-9/18 1-9/19 1-9/18 1-9/19

588 603

0100200300400500600

1-9/18 1-9/19

Long term contracting – Key driver for MacGregor

Construction output – Key driver for Hiab

Global container throughput (MTEU) – Key driver for Kalmar

Merchant ships > 2,000 gt (excl. ofs & misc) Offshore mobile units

United States Europe

Source: Oxford Economics

Source: Drewry

+0.5% +3.0%

+2.6%

Historical average Historical average

-43%-19%


369 432550 486 450 516

417 396

289307

301294 357

341340 307

126124

131141

184 165

116 156784

863

981921

991 1,022

872 858

0

200

400

600

800

1,000

1,200

Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

Kalmar Hiab MacGregor

Orders received declined from the comparison period

Orders receivedMEUR

-19%(y/y)

-19%(y/y)+10%(y/y)

+4%(y/y)

-19%(y/y)


0

837 947 1,003 1,012 1,127 1,101 1,083

0

329337 371 453

483 453 458

0

519503

513530

536 519 7121,684

1,7861,887

1,9952,145 2,072

2,251

0200400600800

1,0001,2001,4001,6001,8002,0002,2002,400

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19


Order book increased

Order bookMEUR

-11%(y/y)

Order book by reporting segment, Q3 2019

48%

20%

32%



SalesMEUR

Comparable operating profitMEUR

Sales increased, comparable operating profit up by 18%

389 415 444 401 427 424

295 260318

316358 307

133 130

149139

127 170816 805

910856

911 901

0

250

500

750

1,000

Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19


57.2 57.8

69.6

57.464.3

68.3

-20

-10

0

10

20

30

40

50

60

70

80

Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19

Kalmar Hiab MacGregor Cargotec total EBIT*

*) Including Corporate admin and support


Service and software* salesMEUR

247 239 257 249 259 269

29 3947

38 41 44

0

50

100

150

200

250

300

350

Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19

Q3 2019 service sales Kalmar +4%

• +3% in comparable FX and adjusted for divestments

Hiab +14% MacGregor +27% Total service sales +7% in

comparable FX and adjusted for acquisitions and divestments

Software sales +11%

Service and software sales constituted 34% of total sales in 1-9/19

Service and software sales increased

*Software sales defined as strategic business unit Navis and automation software

Services

Software

BusinessareasCargotec’s January-September 2019 interim report

Cargotec’s January-September 2019 interim report

MEUR Q3/19 Q3/18 Change

Orders received

396 486 -19%

Order book 1,083 1,003 +8%

Sales 424 415 +2%

Comparable operating profit

47.8 38.6 +24%

Comparable operatingprofit margin

11.3% 9.3% +196bps

Orders received decreased Decline in automation solutions,

projects and in mobile equipment

Sales increased Services growth +3% in

comparable FX and adjusted for divestments

Profitability improvement driven by growth in sales and by a favourable mix

Kalmar Q3 – comparable operating profit increased



Orders received

307 294 +4%

Order book 458 371 +23%

Sales 307 260 +18%


34.1 24.2 +41%


11.1% 9.3% +179bps

Orders received grew by 4% Growth in the Americas (+27%),

decline in EMEA (-7%)

Sales +18% Sales +12% excl. Effer acquisition Service sales +14%

Comparable operating profitincreased due to growth in sales

Hiab Q3 – solid orders continued



Orders received

156 141 +10%

Order book 712 513 +39%

Sales 170 130 31%


-5.8 1.0 < -100%


-3.4% 0.8% -417bps

Orders received increased by 10% Decline in equipment orders,

service orders +30%

Sales increased by 31% Sales growth excl. TTS 17% Service sales +27%, +9% excl. TTS

Comparable operating profitdeclined Low capacity utilisation, lower sales

margins, and cost overruns in certain offshore projects

Productivity improvements areongoing

TTS consolidated since 1 August 2019

MacGregor Q3 – further productivityactions required

Financials and outlookCargotec’s January-September 2019 interim report


Key figures – profitability improved7-9/19 7-9/18 Change 1-9/19 1-9/18 Change

Orders received, MEUR 858 921 -7% 2,752 2,766 0%

Order book, MEUR 2,251 1,887 +19% 2,251 1,887 +19%

Sales, MEUR 901 805 +12% 2,669 2,394 +11%

Comparable operating profit, MEUR 68.3 57.8 +18% 190.0 172.5 +10%

Comparable operating profit, % 7.6% 7.2% 7.1% 7.2%

Items affecting comparability, MEUR -10.5 -3.3 < -100% -28.1 -43.4 +35%

Operating profit, MEUR 57.9 54.5 6% 162.0 129.1 +26%

Operating profit, % 6.4% 6.8% 6.1% 5.4%

Net income, MEUR 29.7 37.9 -22% 89.7 73.9 +21%

Earnings per share, EUR 0.46 0.58 -21% 1.39 1.13 +23%

Earnings per share, EUR* 0.56 0.63 -11% 1.68 1.71 -2%

*) Excluding items affecting comparability and adjusted with related tax effect


Cash flow from operations improved

12

40

88

112

-4

2717

86

3141

81

-20

0

20

40

60

80

100

120

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19

Cash flow from operations before financing items and taxesMEUR


Two bonds issued in Q3 in the aggregate amount of EUR 250 million

Interest-bearing net debt EUR 927 million (31 Dec 2018: 625) Average interest rate* 1.8% (2.4%) Net debt/EBITDA 2.8 (2.3)

Net debt and gearing increased mainly due to IFRS 16 Gearing without IFRS 16

approximately 52%

Total shareholders’ equity EUR 1,434 million (1,426) Equity/total assets 36.0% (40.9%)

Balanced maturity profile EUR 150 million loans maturing in 2019

Strong financial position

150

198

142166

125100

273

0

50

100

150

200

250

300

2019 2020 2021 2022 2023 2024 Later

578719

622503 472

625749178

46.7%

59.2%

46.4%36.0%

43.8%

64.5%

0%

20%

40%

60%

0200400600800

1,0001,200

2013 2014 2015 2016 2017 2018 Q3/19

Net debt IFRS 16 Lease liability** Gearing-%

Maturity profile

Net debt and gearing

MEUR

MEUR

33.1%

*Excluding on-balance sheet lease liabilities**IFRS 16 transition adjustment 1 January 2019


ROCE improvement driven by higher profitability

0

2

4

6

8

10

12

2013 2014 2015 2016 2017 2018 1-9/19

ROCE-% Comparable operating profit margin %

ROCE (return on capital employed), last 12 months

7.1

8.6


Outlook for 2019Cargotec reiterates its outlook published on 8 February 2019 and expects its comparable operating profit for 2019 to improve from 2018 (EUR 242.1 million).

cargotec q3 2019 interim report presentation · cargotec’s january-september 2019 interim report...

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